Swiss Franc appreciates against US Dollar as traders await US Nonfarm Payrolls data
The Swiss Franc (CHF) extends gains against the US Dollar (USD) for the second consecutive day on Friday, with the USD/CHF pair hitting session lows at 0.7872 so far, down from nearly two-month highs at 0.7927 earlier in the week.
The Swissie is drawing some support from a moderate US Dollar weakness, as investors trim their USD long positions, ahead of the all-important US Nonfarm Payrolls (NFP) report, due later on Friday.
Market analysts anticipate an 85K increase in net jobs in May, figures significantly below April’s 115K increase yet still consistent with a solid labour market, especially compared with the 10K average seen last year. The NFP report comes after a string of upbeat manufacturing and services activity numbers seen earlier in the week, and, if confirmed, will endorse the view that the Federal Reserve might be forced to hike rates later this year if price pressures remain high.
On the geopolitical front, the ceasefire between Israel and Lebanon has been refused by the Hezbollah group, and the Israeli army has continued to hit targets in the country. This is dampening hopes of any breakthrough in the US-Iran peace process and is likely to provide support to the safe-haven US Dollar.
In Switzerland, the calendar is thin on Friday. Data released on Thursday revealed that consumer inflation remained steady in May, against market expectations of a moderate uptick, which strengthens the case for a steady Swiss National Bank (SNB) monetary policy for the foreseeable future.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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